Wednesday, December 07, 2005

The Fall of the TPA - School Districts Stuck With Losses

In September of 2003 I wrote a short story titled "The Rise of The TPA." At that time we were beginning to see school districts hire Third Party Administrators to help with compliance issues relating to their 403(b) & 457(b) plans. I devoted a lot of my attention in 2003 and 2004 to one TPA, Envoy Plan Services. I didn't like Envoy or how it conducted business and I wrote to several school districts expressing my concerns. Envoy is at this point still in business, however the company it uses (or used to use) to outsource its compliance and common remitting has apparently gone to the dark. Plan Compliance Group is being accused by three states of mishandling or stealing school employees retirement funds. There is no evidence that Envoy is involved, nor have they been mentioned in any reprots, investigations, or lawsuits. I am at this point unclear of the relationship with Envoy and Plan Compliance Group, though I have call into Robert Hornaday to find out.

Plan Compliance Group is being charged with stealing money from school employees and I have been unable to reach Bill Reimers, the President for over a month to find out if he has a side to his story. The Department of Education in Hawaii and the Attorney General of Hawaii are the first to sue Plan Compliance Group for money that has disappeared.

This is not an isolated event, Plan Compliance Group is just the latest in a series of TPA failures in the U.S. that has literally cost educators millions of dollars (actually it cost the school districts millions). Last year both Horizon/Flagship Benefits Administrators and NEBSOnline both failed after stealing money from school employees before sending their retirement contributions on to the intended retirement vendor.

I have compiled links to several articles regarding the failures of these companies and will continue to update you on the Plan Compliance Group situation.

I will continue to track this developing story. I have put in several phone calls to Mr. Reimers without a response. I have also called Envoy Plan Services to get their response. At this point it is unclear whether a relationship still exists with Plan Compliance Group and Envoy or whether any funds are missing. As soon as I find out more information, good or bad, I'll update this blog.